The following transactions were selected from the records of Evergreen Company: |July 12|Sold...
Question:
The following transactions were selected from the records of Evergreen Company:
| July 12 | Sold merchandise to Wally Butler, who paid the $1,000 purchase with cash. The goods cost Evergreen Company $600 |
| July 15 | Sold merchandise to Claudio's Chair Company at a selling price of $5,000 on terms 3/10, n/30. The goods cost Evergreen Company $3,500. |
| July 20 | Sold merchandise to Otto's Ottomans at a selling price of $3,000 on terms 3/10, n/30. The goods cost Evergreen Company $1,900. |
| July 23 | Collected payment from Claudio's Chair Company from the July 15 sale. |
| August 25 | Collected payment from Otto's Ottomans from the July 20 sale. |
Prepare journal entries to record the transactions, assuming Evergreen Company uses a perpetual inventory system.
Perpetual Inventory Method:
The perpetual method of inventory is an inventory recording method at which for every change in inventory (sale or purchase) the inventory records are automatically updated. This means that there is no cut-off since the records are updated continuously.
Answer and Explanation: 1
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View this answerJuly 12
| Cash | 1,000 | |
| Sale | 1,000 | |
| Cost of Goods Sold | 600 | |
| Merchandise Inventory | 600 |
July 15
| Accounts Receivable | 5,000 | |
| Sales | 5,000 | |
| Cos... |
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Perpetual and Periodic Inventory Systems
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